AdvChap2.ppt

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GOALS

LESSON

2.1 THE EVOLUTION OF

ADVERTISING

 _{Describe the history of advertising}  _{Discuss future developments in}

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The History of Advertising

 _{In the Beginning}

 _{Before 1800--paid advertising initiated in 1704}

 The Boston Newsletter contained paid ads for items such as real estate and rewards for stolen merchandise.

 _{Industrial Revolution}

 In 1850 the introduction of the sewing machine made mass production a possibility.

 _{The 1800s--telegraph and newspapers}

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The History of Advertising



_{Advertising Matures}

 _{1920s--more visual}

 Some ads were so beautifully illustrated that they are considered works of art today.

 _{1930s--radio emerges}

 This was the most significant advertising medium until TV.

 _{1950s--television appears}

 Early Ads focused on the product only

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Advertising – Today and Tomorrow



_{Advertising Today}

 _{Matured media – most ads are not truly new}

or innovative

 _{The Internet –}

 In the late 90s, Internet advertising doubled in one year.

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Advertising – Today and Tomorrow

 _{Advertising Tomorrow}

 _{The Internet}

 Advertisers are embracing social media and mobile advertising

 Mobile ad spending has grown 90% each year from 2010-2013

 _{Interactive media –}

 WebTV brings the Internet to you through television.

 _{Future technologies}

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GOALS

LESSON

2.2 THE ADVERTISING INDUSTRY

 _{Describe the structure of the advertising}

industry

 _{Explain the forces that may change the}

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Structure of the Industry

• _{Business Selects either an Advertising Agency or}

creates their ads “In House”

• Who Advertises?

• Retailers, wholesalers, government

• _{Advertising Agency}_{– A company that specializes in} providing creative and business services involved in

planning, preparing, and placing ads. Also specialize in measuring ads effectiveness, buying media, create

Internet sites, etc.

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Changes in the Industry

 _{New retail channels = more ways to reach} customers.

 _{Catalogs, TV shopping networks, online}

shopping, Mobile devices

 _{Market saturation – 30 minute primetime TV} programs have 8-9 minutes of advertising. Daytime has 21 minutes per hour.

 _{Integrated marketing communication}

 _{Advertisements are part of a marketing mix.}

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Changes in the Industry

 _{Media consolidation}

 _{In recent years, many media companies}

have merged. For example, a single

company could own several radio stations.  _{Business consolidation}

 _{Effects advertising in 2 ways:}

Fewer businesses for potential clients

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GOALS

LESSON

2.3 ADVERTISING AGENCIES

 _{Differentiate between the services}

provided by different types of advertising agencies

 _{Describe the organization and roles within}

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Differences Between Agencies



_{In-house agency}



_{Advertising department within a company}

whose main business is not advertising.



_{Full-service agency}



_{Provide a wide range of services designed}

to meet a clients complete advertising

needs. Services include account

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Differences Between Agencies

 _{Creative boutique}

 _{Specialize in creative concepts (write creative}

text, provide artistic services). They do not prepare or place the ads. They sell “ideas”.  _{Media-buying services}

 _{Buy media time and space on radio and TV}

and then resell it to advertising agencies.  _{Interactive agency}

 _{Specialize in helping clients prepare advertising for}

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Full Service Agency - Roles of the Individuals

 _{Account services – Identify the benefit of the} clients product, possible consumers to target, and the best positioning strategy to be used.  _{Marketing services – Research, sales}

promotion, event sponsorship, direct

marketing and public relations are provided.  _{Creative services – Develop the message.}

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Full Service - Roles of the Individuals (cont)

 _{Production services – Produce polished}

advertising messages. Brings messages to life for radio and TV. Includes producers and assistants.  _{Media services – Media planners, media buyers}

and media researchers help the client choose the most effective media options within their budget.  _{Administrative services – Traffic managers ensure}

that creative services and media services

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GOALS

LESSON

2.4 REGULATIONS AND ETHICS

 _{Describe how the advertising industry is}

regulated

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Government Agencies

 Federal Trade Commission (FTC)

 _{Created in 1914 to enforce laws prohibiting unfair}

methods of competition (i.e. false advertising).

 _{Also enforce regulations regarding advertising that is}

misleading to the public.

 Regulate labeling (ex. Nutrition labels)

 _{Federal Communications Commission (FCC)}

 _{Enforce laws prohibiting obscenity, fraud, and lotteries on radio}

and TV.

 Food and Drug Administration (FDA)

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Government Agencies

 _{Securities and Exchange Commission (SEC)}

 _{Enforces laws for the advertising of securities}

(stocks and bonds)  _{U.S. Postal Service}

 _{Enforce laws for direct mail advertising.}

 _{Bureau of Alcohol, Tobacco, and Firearms}

 _{Influence advertising for alcohol, tobacco,}

and firearms.

 _{Example: Active athletes can’t be in alcohol}

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Ethics in Advertising

 _{Competition and Deception}

 Puffery – the use of superlatives such as “greatest” or “best”. This is legal because the courts believe that consumers know that it isn’t necessarily true.

 Emotional appeal

 This is legal. For example, an advertisement that appeals to your emotions about how its car will add to your prestige.

 Advertising Aimed at Children

 Children as consumers – Children are consumers. They can convince parents to buy products they see advertised.

 _{Uneducated consumers –}

 They have no concept of money